Adding house wife as a ltd company director

[northernladuk]

Accountant been sorted, will kick off from June 01, 2019 as trying to keep the cost as low as possible due to high mortgage and nursery/private school fees, Thanks

Not the smartest move seems you've got an accounting problem. Passing shares around after formation isn't a good place to be in and you cannot use waivers so not the best start.

[TechRiskPartners]

I got it

Not the smartest move seems you've got an accounting problem. Passing shares around after formation isn't a good place to be in and you cannot use waivers so not the best start.

I got it, I am due to talk to an Accountant from 01 June 2019, looks like I need to kick it in now really.

Thanks for the advice, I am little overwhelmed and busy talking to prospective Clients that I missed the most important part, setting the company right. Thanks

[pr1]

I got it, I am due to talk to an Accountant from 01 June 2019, looks like I need to kick it in now really.

Thanks for the advice, I am little overwhelmed and busy talking to prospective Clients that I missed the most important part, setting the company right. Thanks

if your company hasn't started earning any money yet it's probably worth closing it and opening company2 (with the advice of an accountant)

[JohntheBike]

Not knowing the specifics or background in full.

But generally: if you are going to make her a shareholder, you may wish to consider either director and/or employee in the company, if she does not have/has little income elsewhere.

This will also help with meeting the eligibility criteria for entrepreneurs relief too when you come to close the company in the future, as you have to be a director or employee holding 5% or more of the shares.

If she is not working and has no other income, you'd at least want to consider giving her a salary to match the NI threshold. But if you are both employees, you may wish to have one employee at the personal allowance level and the other just over the NI threshold to make use of the employment allowance.

There's lots of possibilities on this one!

"There's lots of possibilities on this one!"

yes, and if both are employees as well as director/shareholders, then clearly each could have earnings below the upper tax limits, depending on the gross income of the company, and both would each have the dividend tax allowance, not to mention redundancy when the company is closed down.

[Lance]

"There's lots of possibilities on this one!"

yes, and if both are employees as well as director/shareholders, then clearly each could have earnings below the upper tax limits, depending on the gross income of the company, and both would each have the dividend tax allowance, not to mention redundancy when the company is closed down.

redundancy?
How does that work?
And if it does work why would anybody do an MVL?

Genuine question.

[JohntheBike]

redundancy?
How does that work?
And if it does work why would anybody do an MVL?

Genuine question.

If you have been an employee of YourCo and YourCo closes, you are entitled to redundancy from the company, providing it as funds to pay, although I guess you could show a book value to offset the corporation tax for the closing year, even if it hasn't actually got the funds.

It's calculated by multiplying your weekly wage by the number of years service (+.5 over a certain no. of years.) up to a maximum of 20 years. I've been contracting over 20 years, and both my wife and I have been equal shareholders, directors and employees for all of that time. This is how I set the company up originally based on the advice of accountants.

However, there are those IBOYA, who disagree with this approach. But I've checked it and it is legitimate.

[Lance]

If you have been an employee of YourCo and YourCo closes, you are entitled to redundancy from the company, providing it as funds to pay, although I guess you could show a book value to offset the corporation tax for the closing year, even if it hasn't actually got the funds.

It's calculated by multiplying your weekly wage by the number of years service (+.5 over a certain no. of years.) up to a maximum of 20 years. I've been contracting over 20 years, and both my wife and I have been equal shareholders, directors and employees for all of that time. This is how I set the company up originally based on the advice of accountants.

However, there are those IBOYA, who disagree with this approach. But I've checked it and it is legitimate.

I know a guy who did it. And the government paid part of the money as well as the company had nothing left. It's not something I've investigated personally as I'm not close to wanting to quit. But I have just googled it and this suggests it can't (shouldn't) be done.

Something may have changed in 20 years, if only accountants attitudes. Although I'd happily take your money for bad advice now that won't turn out to be for another 20 years as I won't care by then.

[fiisch]

I know very little on this topic, despite my wife is a 50% shareholder as she is also a home-maker.... My brilliant accountant sorted this for me.

However, one point not yet mentioned which my accountant did point out, was to keep the salary below £10k per year to avoid auto-enrolment for pension...

[TheCyclingProgrammer]

If you have been an employee of YourCo and YourCo closes, you are entitled to redundancy from the company, providing it as funds to pay, although I guess you could show a book value to offset the corporation tax for the closing year, even if it hasn't actually got the funds.

It's calculated by multiplying your weekly wage by the number of years service (+.5 over a certain no. of years.) up to a maximum of 20 years. I've been contracting over 20 years, and both my wife and I have been equal shareholders, directors and employees for all of that time. This is how I set the company up originally based on the advice of accountants.

However, there are those IBOYA, who disagree with this approach. But I've checked it and it is legitimate.

Anyway, why faff around with that approach - if you're both shareholders you'll be entitled to a capital distribution when the company is wound up. Take dividends to use up your basic rate band and the dividend allowance, then take the rest as capital distribution to make use of your CGT tax free band and pay tax on the rest at a fairly low 10% if you qualify for ER.

[Old Greg]

is it a good idea ?
what should be the percentage ?

thanks for help

What percentage? Director is 100% or 0%.